Why Deming, Why Now?

Rafael Aguayo

W. Edwards Deming, renowned scientist, quality and management thinker passed away in December 1993. Technology, globalization and financial crisis have since dramatically altered the economic and political landscape. What possible relevance could Deming have in the 21st century?

The answer is plenty. With the failure of companies, governments and economies all around us it is becoming clear that now, more than ever, Deming’s wisdom is sorely needed. To understand Deming we need to do a quick review of his contributions, history and legacy. No other management thinker, with the possible exception of Deming’s teacher and friend, Walter Shewhart, can claim to have dramatically impacted so many companies and even whole nations. We will cite 4 major cases where Deming or Shewhart had a profound positive impact on companies and whole nations.

The Deming/Shewhart Management Legacy

Exhibit A. In the early part of the Twentieth Century as the United States was industrializing, quality and management were areas of critical importance. Frank Gilbreth, Fredrick Taylor and Henry Ford were among the well known names who addressed these issues. One large company, American Telephone and Telegraph, or AT&T, found that although it had access to the best methods and thinking of the day, they were insufficient. The harder they tried to make products alike, the worse the results. A young physicist at Bell Laboratories was assigned the problem and the result were a series of concepts and tools that would revolutionize quality. In 1931 Shewhart published Economic Control of Quality of Manufactured Product, and statistical quality improvement was born. The formal name for his tools came to be known as Statistical Process Control. The methods were adopted by AT&T systemwide and the result was the company became the premier company in the world with the highest level of quality and reliability.

Walter Shewhart had a friend and colleague, W. Edwards Deming, who was also trained in physics. They collaborated in the new field of statistics and Deming became one of the leading experts in quality control, behind Shewhart. Later in the decade Deming invited Shewhart to give a series of lectures on quality in Washington, D.C. These were later edited into a book Statistical Method from the Viewpoint of Quality Control, (1939) for which Deming was the editor.

Exhibit B. The US had followed a policy of isolationism prior to World War II and was reluctantly dragged into the Second World War when Pearl Harbor was attacked. The country had to quickly convert peace time plants to make massive amounts of military goods. The Department of War launched a crash program in quality control to help make the transition. Deming was one of the leading experts invited to teach plant managers and engineers the principles of quality control. One of the premises of quality control is that improving quality increases productivity and decreases costs. Higher productivity and fewer problems and defects also results in a dramatic increase in capacity. This is counterintuitive and the opposite of conventional thinking. But the incredible results confirmed this. The US became the most productive nation on Earth and military production zoomed. At the end of the war a popular refrain was, “production won the war.”

Exhibit C. But after the war as American service men rushed back home companies quickly forgot the lessons of quality. Now any company that could produce had a ready market, especially since much of the manufacturing capacity of the rest of the world had been destroyed. US quality improvements stalled and in many cases went backwards. On the other side of the Pacific, Japan was suffering from its defeat. It had lost its foreign markets and major suppliers of raw materials. It also had a well deserved reputation for shoddy consumer products. A group of Japanese leaders began to believe that quality control could have an epochal effect on the country and Deming’s name kept showing up in the literature. They invited Deming to give a series of lectures to Japanese managers and engineers just as he had in the US.

Deming accepted but at that first lecture realized he was making the same mistake he had made in the US, he was not addressing one key audience that he now realized was critical—top management. He spoke to his hosts who understood the problem and sent out telexes to the CEOs of major Japanese companies. In that first seminar to management Deming told them their responsibilities. He kept coming back to Japan almost yearly to teach more people and clarify and expand his teachings. The results were equally as incredible as the results in the US during WWII. Japan went from a defeated nation with few resources and a reputation for shoddy consumer goods to a nation with a reputation for the best quality in the world and the second largest economy in the world, behind the US. It has become a model of development and an inspiration for other Asian nations.

Exhibit D. Deming’s students, Japanese industrialists, learned their lessons too well. They started to dominate markets worldwide in such diverse goods as radios, televisions, consumer goods, motorcycles, watches and cameras. In some cases they drove American firms completely out of those industries. By the late 1970s they were closing in on automobiles, semiconductors and computers. And American firms were baffled and helpless. American management consultants were at a loss. The advice of American management thinkers fell flat. But in 1980 NBC, which was equally baffled, began to put together a show to try and explain what made Japanese Industry so formidable. They heard of this 79 year old professor who had been to Japan in the 1940s and 1950s and had been recognized by the Japanese government for his contribution to Japanese industry. At his home in Washington, D.C., he showed them the 8mm video of him receiving Japan’s highest honor. The last 20 minutes of the NBC white paper, If Japan Can Why Can’t We?, featured Deming.

After the show aired Deming was inundated with calls. He was booked 3 years in advance. He began a series of consulting assignments and launched his now legendary 4-day seminars to train American managers. The results were just as stunning with some companies being brought back from near extinction. Among these were Ford, Intel and Harley Davidson. And quality, quality management, TQM and other movements sprung up in the 1980s inspired by Deming. ISO 9000 made a comeback. Some of the other ideas that were launched in response to the emphasis on quality and process improvement during the era were Six Sigma and in the 1990s the term Lean was introduced in the US as an attempt to replicate some of the Japanese efficiency.

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